TECHNOLOGY STRATEGIC SOURCING

Abstract

Strategic sourcing is essential for companies that follow supply chain management principles. It focuses on effectively managing the supply base by identifying and selecting suppliers for strategic long-term partnerships, participating in supplier development initiatives by effectively allocating resources to improve supplier performance, providing benchmarks and continuous feedback to suppliers, and, in some cases, pruning suppliers. Currently, most strategic sourcing methodologies are subjective, with only a few objective decision models focused on supplier evaluation, which have their own set of limitations. This paper proposes an objective framework for effective supplier sourcing that takes into account a variety of strategic and operational factors. Suppliers are divided into groups based on their performance, which helps managers find candidates for long-term strategic partnerships, supplier development programmes, and pruning. In addition, this study looks into the differences between supplier groups when it comes to suggesting possible improvement strategies for underperforming suppliers. We also show how our framework is methodologically rich when compared to some of the traditional methods proposed and used for supplier evaluation. The study's supplier data came from a large multinational telecommunications corporation.